Jerry Brown's $107 billion California spending plan leaked

Updated 8:16 am, Thursday, January 9, 2014

2014-2015 budget proposal

Media: San Francisco Chronicle

Sacramento --

A robust 2013 dropped billions of unanticipated dollars into California's coffers, putting the state on the best financial footing it's had in a decade, according to a spending plan for the 2014-15 year that Gov. Jerry Brown will ask lawmakers to adopt.

The $107 billion general fund plan provides billions of dollars more to K-12 schools and the state's public colleges and universities and includes a whopping $11 billion to pay down a $25 billion headache that officials at the Capitol call the "Wall of Debt" - money owed to schools, special state funds and Medi-Cal that was withheld during the recent budget crisis.

Brown also proposes a constitutional amendment to ensure a rainy-day fund for the state in future years when California may again see a crisis. He proposes putting aside $1.6 billion in the next fiscal year.

"The budget proposes a multiyear plan that is balanced, pays off budgetary debt from past years, saves for a rainy day, and makes wise investments in education, the environment, public safety, infrastructure and California's extensive safety net," the governor's proposal says.

Spending highlights

The plan proposes spending $9 billion more than the current year's $98 billion budget. Some of the major parts of the spending plan are:

Photo: Damian Dovarganes, Associated Press

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In this Jan. 22, 2013 file photo California Gov. Jerry Brown appears at the California State University Board of Trustees meeting in Long Beach, Calif.

In this Jan. 22, 2013 file photo California Gov. Jerry Brown appears at the California State University Board of Trustees meeting in Long Beach, Calif.

Photo: Damian Dovarganes, Associated Press

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Gov. Jerry Brown proposes spending $107 billion.

Gov. Jerry Brown proposes spending $107 billion.

Photo: Rich Pedroncelli, Associated Press

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The plan proposes spending: -- $10 billion in new spending for K-12 schools, raising the total to
$61.6 billion. This means per pupil spending in California would rise to
$9,194 in 2014-15 from $8,469 this year. less

The plan proposes spending: -- $10 billion in new spending for K-12 schools, raising the total to
$61.6 billion. This means per pupil spending in California would rise to
$9,194 in 2014-15 from $8,469 ... more

Photo: Brant Ward, The Chronicle

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$2.9 billion each to the California State University and University of California systems to keep their tuitions from rising.

$2.9 billion each to the California State University and University of California systems to keep their tuitions from rising.

Photo: Brant Ward, The Chronicle

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$670 million increase in funds for Medi-Cal benefit expansion.

$670 million increase in funds for Medi-Cal benefit expansion.

Photo: Lea Suzuki, The Chronicle

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$815 million for deferred maintenance for state parks, highways, schools, community colleges, courts, prisons and hospitals.

$815 million for deferred maintenance for state parks, highways, schools, community colleges, courts, prisons and hospitals.

Photo: Chris Stewart, SFC

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$11 billion toward a $25 billion debt the state accumulated from loans
taken from special funds, unpaid costs to schools and deferred payments
to state worker pensions and Medi-Cal. This would also pay off the
remainder of a controversial $15 billion loan taken out during the
Schwarzenegger administration to help maintain spending levels. less

$11 billion toward a $25 billion debt the state accumulated from loans
taken from special funds, unpaid costs to schools and deferred payments
to state worker pensions and Medi-Cal. This would also pay off ... more

Photo: Rich Pedroncelli, AP

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Jerry Brown's $107 billion California spending plan leaked

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-- $10 billion in new spending for K-12 schools, raising the total to $61.6 billion. This means per pupil spending in California would rise to $9,194 in 2014-15 from $8,469 this year.

-- $815 million for deferred maintenance for state parks, highways, schools, community colleges, courts, prisons and hospitals.

-- $11 billion toward a $25 billion debt the state accumulated from loans taken from special funds, unpaid costs to schools and deferred payments to state worker pensions and Medi-Cal. This would also pay off the remainder of a controversial $15 billion loan taken out during the Schwarzenegger administration to help maintain spending levels.

The budget was helped by $4 billion in unanticipated capital gains taxes, according to the plan.

Brown was scheduled to release the budget on Friday during three news conferences across the state, but the plan was leaked Wednesday afternoon and was soon all over the Web. In response, the governor pushed up his news conferences to Thursday.

California faced a $26 billion deficit and years of anticipated structural deficits when Brown took office in 2011 and promised to turn around the state. Although California appears to be improving, it still faces $218 billion in unfunded pension obligations.

Brown's proposal stresses caution during the economic windfall, saying "stability of the past year will require fiscal restraint." He warns there remain economic risks that could result in significant lost revenue, including fallout from the federal debt ceiling crisis or the threat of another recession.

'Recession is inevitable'

"While there are few signs of immediate contraction, we know from history that another recession is inevitable," the proposal says.

Money in the 2014-15 budget is not directed toward any part of the unfunded pensions, including the growing $80.4 billion unfunded teachers' retirement system, but the administration said it plans to work with the "Legislature, school districts, teachers and the pension system on a plan of shared responsibility to achieve a fully funded, sustainable teachers' pension system within 30 years."

The governor's budget will now be mulled over by the Democrat-controlled Legislature, which has been calling for investing in communities hurt by the recession, as well as universal transitional kindergarten.

"I know that the governor wants to be fiscally prudent," said Assemblyman Tom Ammiano, D-San Francisco. "So do I, but I don't think spending is always reckless. ... There are a lot of good things like that in the speaker's budget plan and I expect we will work with the governor to get some of them taken care of."

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